TaxTMI 
TaxTMI 
2014 (1) TMI 1879
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....ution was made before filing of return though there has been violation to section 2(24)(x) read with section 36(I)(va) of the I.T.Act. 2. On the facts and circumstances of the case Ld. CIT(A) has erred in deleting the addition of Rs. 18,78,032/- on the basis of decision of Hon'ble ITAT though the addition was calculated @ .5% of average investment as per Rule 8D of I.T.Rule." 4. It was submitted by the ld. DR that in the course of assessment the AO had disallowed PF and ESI in respect of employees contribution deposited after the due date. It was the submission that the ld. CIT(A) had deleted the disallowance. The ld. DR vehemently supported the order of the AO. 5. In reply the ld. AR submitted that the amounts have been paid before the due date of filing the return and consequently in view of the decision of the Hon'ble Supreme Court in the case of Alom Extrusions reported in 319 vs 306 the order of the ld. CIT(A) was liable to be upheld. 6. We have considered the rival submissions. As it is noticed that the assessee had made the payments in respect of the employees contribution to PF and ESI before the due date of filing the return as is apparent from Tax Audit ....
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....hout any prejudice to above, the learned A.O. erred in law in applying the Explanation to section 80-IA of the Act in a retrospective manner. 4. The appellant craves leave to amend, alter, modify, substitute, add to, abridge and/or rescind any or all of the above grounds." 13. It was submitted by the ld. AR that the only issue in the assessee's appeal was against the action of the ld. CIT(A) in holding that the assessee was not a developer for the purpose of allowance of deduction u/s 80-IA(4)of the IT Act. It was the submitted by the ld. AR that in the course of assessment the AO has disallowed the claim of deduction u/s 80-IA(4) of the Act on the ground that by the Finance Act 2007 new explanation has been inserted to sub-section (13) of 80-IA wherein it was explained that a person who enters into a contract with another person for executing a works contract will not be eligible for deduction u/s 80IA of the Act. It was the submission that the assessee was not doing any works contract. It was the submission that the assessee was also charging VAT in respect of the works carried on and done under various projects. The ld. AR placed before us the following chart showing....
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.....e. 10% of Rs. 897 lakhs) See VAT return of Manipur state page 231, 237 of P-III) and details of turnover on page 233, 239) See expenditure ledger on page 166 of P-III) Construction of ROB, Mithapur Rs. 14,59,50,644/- (Pg.397of P-II) 5% of contract value (page 442 of P-II) i.e. Rs. 72,97,532/- See VAT return of Bihar state (page 242 of P-III) details of turnover on page 6 of PIV) See project Balance Sheet (page 170 of PIII) and expenditure ledger on page 179 of P-III) Construction of ROB, Koderma Rs. 11,48,70,607/- (Pg.554 of P-II) Security Deposit was to be recovered by making deduction @ 10% from running bills (page 538) See VAT return of Jharkhand state page 279 of P-III and details of turnover on page 1 of PIV) See project Balance Sheet (page 182 of P-III) and expenditure ledger on page 191 of P-III) Construction of Bridge, Taratala Rs. 12,81,82,420/- (Pg.667of P-II) Rs. 25,63,648/- to cover 2% of total bid amount (page 587) Security Deposit : 15% of the bid amount, i.e. Rs. 1,92,27,363/- See assessment order on pages 3 & 4 of P-IV, listing projects assessed to VAT See project Balance Sheet (page 195 of PIII) and expendit....
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.... contained in section 80IA would apply in relation to the business referred to sub-section (4), which is in the nature of works contract. A works contract is not defined in section 80IA. Now, what would come into consideration is whether the substituted Explanation after sub- clause (13) changed the nature of the meaning of 'infrastructure facility' provided in the Explanation to section 80IA(4). Admittedly, the Explanation to section 80IA(4) gives the meaning the term 'infrastructure facility'. The substituted explanation after sub clause (13) brings in the nature of work as a works contract. The provisions of section 194C, which deals with TDS in respect of payment to contractors for carrying out any work in the Explanation thereto as explained the term 'work' to be an inclusive definition, but has provided an exclusion to be 'does not include manufacturing or supplying of a product. according to requirement or specification of the customer by using materials purchased from a person, other than such customer'. Thus, with this in mind, a perusal of the turnkey contract agreement entered into by the assessee with the Irrigation Department, Govt of A.P clearly shows that the constru....
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....se of ARSS Infrastructure Projects Ltd Vs. ACIT, Circle-2 (1), Bhubaneswar in ITA Nos. 142, 143/CTK/2010 & 483,484/CTK/2011 dated 13-06-2013, wherein one of us was a party and in which case it has been held as under :- "10. Now coming to the merits of the deduction u/s. 801A(4) of the Act. A perusal of the provisions of section 801A(4) of the Act shows that in the explanation 'infrastructure facility' has been specified to mean a road including a toll road, a bridge or a rail system. Admittedly, the assessee is doing the business of development of railway tracks and bridges thereof as also roads. If, we are to accept the contention of the Ld. CIT that the provisions of section 801A(4) of the Act after the substitution of the explanation to section 8OIA of the Act was introduced was only for the purpose of giving the benefit to BUT contracts then, the explanation to section 801A(4) of the Act becomes otiose. This is as explanation to section 801A(4) of the Act specifically provides for the road to include a toll road, a bridge or a rail system. BUT contract in respect of the railway system can never exist. Further, a perusal of the provisions of section 801A of the Act show....